The sky-high costs of housing, childcare and travel in London means it can cost as much as 50% more to achieve a decent standard of living in the capital than the rest of the UK.
A minimum London weighting, rooted in publicly defined minimum living standards, would provide a baseline for employers to ensure the fair payment of their workers. We haven’t had a coherent system for setting a London weighting based on the cost of living since the 1980s, and there have been few increases to allowances in 15 years.
In the midst of the deepest cost of living crisis of recent times, the time is right to revalue London weighting. The Mayor of London has committed to looking at London weighting as part of the mayoral manifesto, and the issue is currently under review by the GLA.
The new report, funded by Trust for London and produced by Loughborough University’s Centre for Research in Social Policy (CRSP), builds on analysis of the London weighting released in 2016. It puts forward an updated basis for calculating a minimum London weighting using ongoing research on a Minimum Income Standard (MIS) for the capital.
Combining calculated London weightings for different household types and areas, the report shows a minimum London weighting of £9,600 in Inner London and £6,549 in Outer London is needed.
Many sectors are paying well below this and take an inconsistent approach to setting weighting allowances, which can range from a maximum of £6,906 in the Met Police, to £4,967 in the NHS.
A minimum London weighting of £6,549 a year would begin to help to cover the essential costs of living for many Londoners. The burden of these essential costs is felt most acutely by those in the lowest paid jobs, but a minimum London weighting should also support swathes of key workers on low-to middle-incomes (those earning up to £40,000) reach a minimum living standard to participate in the life of the city they serve.
Matt Padley, Research Fellow at CRSP, said, “Since 2015, our research on minimum living standards in the capital has shown how much more people living in London need.
“This is not about living an extravagant life, but is rooted in a shared understanding and agreement about what is needed as a minimum to take part in the world.
“The cost of meeting this standard has risen over time, and while welcome, it’s clear that supplements paid by employers in London are generally falling short of enabling people to meet their needs. With costs increasing, now is the right time to consider the crucial role that a minimum London weighting can play in ensuring more households can live with dignity in the capital.”
Manny Hothi, Chief Executive at Trust for London, said, “We are currently facing the worst cost of living crisis in a generation and costs in London are skyrocketing.
“We must harness every possible tool to maintain and improve people’s living standards, including revisiting London weighting. It’s unacceptable that the key workers that kept the city afloat during the pandemic are now having to choose between feeding themselves and paying their bills.”